I purchased 83 shares of Omega Healthcare Investors Inc. (OHI) for $34.88 a share on June 25, 2015. OHI is a real estate investment trust that focuses on providing financing and capital to the long-term healthcare industry with a particular focus on skilled nursing facilities located in the United States. Founded in 1992 the company operates in 48 states with over 900 properties. Below is the three year tend for OHI:
OHI is likely not a name many have heard of, but that are the largest skilled nursing facility REIT in the industry. In the last ten years the company has improved their revenue by almost $400 million dollars, but the share count has also increased from approximately 52 million to 127 million shares. This gives a compounded annual growth rate of 7.73% which has allowed them to increase their dividend by almost 11% on a annual basis. This purchase gives me a yield of 6.2% and will add $179.28 to my yearly income. This does not account for the shares that I will get through DRIPing the funds back into the stock.
There is some confusion which I believe is putting this stock on sale as many believed there was a dividend cut as they paid out a lower amount that normal, but made it up over the next month. This is explained best by the company website which states:
"We are currently updating our dividend chart and table to accurately reflect our recent quarterly dividend payments. In 1Q 2015, we paid a dividend of $0.53 per share on February 17 (for November, December and January), and in 2Q 2015, we will pay a total dividend of $0.54 per share, paid in two separate installments of $0.36 (for February and March) paid on April 7, and $0.18 (for April) to be paid on May 15. The two part payment of our 2Q dividend was a result of our acquisition of Aviv REIT via merger, which closed on April 1, 2015. In the future, our dividends will continue to be paid quarterly."
OHI is in a field that will likely grow for years to come with our aging US population and one which will require more real estate to treat these patients. OHI is the largest player in this field currently and will likely continue to benefit from this position going forward. Additionally, I believe that the threat of a FED rate hike is putting unwarranted downword pressure on the stock price as any increase in rates will be slow and deliberate which makes a great than 6% yield in a stable company extremely enticing.